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Children’s Fund partnerships will have more flexibility in spending their allocated funds over the coming three years, the government has announced.

Children’s Fund partnerships are expected to draw up three-year plans by January 2005. The total allocation of the fund will be between £130m and £149m in each of the next three years.

This means that within specified limits, partnerships will be able to draw varying amounts of their allocation in each of the three years and can carry forward unspent funds where there are clear plans for spending them the next year.

Earlier this year, the Children’s Fund was thrown into a financial crisis when partnerships were told by staff at the Department for Education and Skills that because of an overspend, they would have to give back funds they had already promised to local projects if it had not been spent in time. After protests, ministers found extra cash to prevent partnerships having to renege on local agreements.

In a letter to every partnership children’s minister Margaret Hodge confirms that prevention should continue to be the main objective of Children’s Fund spending.

For the first time council and primary care trust chief executives will be asked to agree the three-year plan drawn up by each Children’s Fund partnership, emphasising the government’s desire for closer collaboration between agencies in preventive work.

Three-year plans should include arrangements for the transfer of responsibility for preventive services from Children’s Fund partnerships to children’s trusts by 2008.

"The kind of services provided by the Children’s Fund will continue to be provided into the medium-term, with children’s trusts taking overall responsibility by 2008 at the latest", said Hodge.

Youth crime prevention is to remain a high priority and although partnerships will no longer be required to spend a specified portion of their allocation on youth justice programmes, Hodge warned that DfES regional teams would not sign off local Children’s Fund plans that suggest "the withdrawal of funding from effective crime prevention projects where it is not consistent with overall movements in level of resource."